Gwendolyn Daniel v. Univ of TX SW Health Systems ( 2020 )

Case: 19-10834 Document: 00515437079 Page: 1 Date Filed: 06/02/2020
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
FILED
No. 19-10834 June 2, 2020
Lyle W. Cayce
GWENDOLYN M. DANIEL, Clerk
Plaintiff - Appellant
v.
UNIVERSITY OF TEXAS SOUTHWESTERN MEDICAL CENTER,
Defendant - Appellee
Appeal from the United States District Court
for the Northern District of Texas
Before WIENER, STEWART, and WILLETT, Circuit Judges.
CARL E. STEWART, Circuit Judge:
Plaintiff-Appellant Gwendolyn M. Daniel filed an Americans with
Disabilities Act (ADA) action against Appellee-Defendant University of Texas
Southwestern Medical Center (UTSMC). She is seeking recovery for UTSMC’s
alleged discrimination and retaliation against her in connection with her
employment as a UTSMC nurse.
The district court granted UTSMC’s Federal Rule of Civil Procedure
(Rule) 12(b)(1) motion to dismiss because UTSMC is an arm of the State of
Texas and therefore entitled to Eleventh Amendment immunity. We AFFIRM.
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No. 19-10834
I.
UTSMC is a public medical institution within the University of Texas
System (UT System) 1 and the largest medical center in the Dallas metropolitan
area. UTSMC is comprised of UT Southwestern Medical School, UT
Southwestern Graduate School of Biomedical Sciences, and UT Southwestern
School of Health Professions. UTSMC is also affiliated with several healthcare
facilities, including but not limited to Parkland Memorial Hospital, William P.
Clements Jr. University Hospital, and, as relevant in this case, Saint Paul
University Hospital. 2
Plaintiff was employed at Saint Paul as a contract registered nurse and
subsequently elevated to a full-time nurse. Plaintiff alleges that due to her
ADA-qualified disability, UTSMC subjected her to continual harassment,
discipline, discrimination, retaliation, and constructive discharge.
In July 2018, Plaintiff initiated this action against UTSMC seeking
economic and equitable relief for ADA retaliation and discrimination. 3
UTSMC moved for Rule 12(b)(1) dismissal, claiming Eleventh Amendment
sovereign immunity. The district court granted the motion for lack of subject
matter jurisdiction because “it is well settled that UTSMC is an arm of the
state of Texas.” The court entered judgment in UTSMC’s favor thereafter.
The Texas Legislature has established both the University of Texas and the UT
1
System. See TEX. EDUC. CODE §§ 65.01–65.461, 67.01–67.62.
In 2015, UTSMC carried out the demolition of Saint Paul University Hospital. See
2
Matt Goodman, So Long, Saint Paul: UT Southwestern Demolishes Historic Hospital, D
MAGAZINE (Nov. 23. 2015), https://www.dmagazine.com/healthcare-business/2015/11/so-
long-saint-paul-ut-southwestern-demolishes-historic-hospital/.
3 Title I of the ADA prohibits discrimination by employers against qualified
individuals with disabilities “in regard to job application procedures, the hiring,
advancement, or discharge of employees, employee compensation, job training, and other
terms, conditions, and privileges of employment.” 42 U.S.C. § 12112(a). And Title V of the
ADA prohibits retaliation against individuals with disabilities who oppose an unlawful
practice under the ADA. See 42 U.S.C. § 12203(a).
2
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Plaintiff subsequently moved for reconsideration which the district court
denied.
Plaintiff now appeals the dismissal order granting UTSMC’s 12(b)(1)
motion and the entry of final judgment. Plaintiff’s appeal centers entirely
around whether her lawsuit is considered a suit against an arm of the State of
Texas for the purpose of Eleventh Amendment protection.
II.
We review questions of subject matter jurisdiction, including sovereign
immunity determinations, de novo. See Machete Prods., LLC v. Page, 809 F.3d
281, 287 (5th Cir. 2015).
“[P]laintiff bears the burden of proof that jurisdiction does in fact exist.”
Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001). In evaluating a
Rule 12(b)(1) motion, “we must take all of the factual allegations in the
complaint as true, but we are not bound to accept as true a legal conclusion
couched as a factual allegation . . . . [A] district court is empowered to find facts
as necessary to determine whether it has jurisdiction.” Machete, 809 F.3d at
287 (internal quotation marks and citation omitted).
III.
Pursuant to the Eleventh Amendment, a state’s sovereign immunity in
federal court extends to private suits against state agencies, state
departments, and other arms of the state. See P.R. Aqueduct & Sewer Auth. v.
Metcalf & Eddy, Inc., 506 U.S. 139, 146 (1993); Richardson v. S. Univ., 118
F.3d 450, 452–54 (5th Cir. 1997) (stating that sovereign immunity protects
“arms of the state”). “While instrumentalities of the state enjoy sovereign
immunity, ‘the Eleventh Amendment does not extend its immunity to units of
local government.’” Providence Behavioral Health v. Grant Rd. Pub. Util. Dist.,
902 F.3d 448, 456 (5th Cir. 2018) (quoting Bd. of Trustees of Univ. of Ala. v.
3
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Garrett, 531 U.S. 356, 369 (2001)). Said differently, not all units of a state
government are immunized from federal action.
To determine whether a unit qualifies as an arm of the state as a matter
of law, 4 “we employ the six-factor test developed in Clark v. Tarrant County,
Tex., 798 F.2d 736 (5th Cir. 1986).” Providence, 902 F.3d at 456. The six Clark
factors are:
(1) Whether the state statutes and case law view the agency as an
arm of the state;
(2) The source of the entity’s funding;
(3) The entity’s degree of local autonomy;
(4) Whether the entity is concerned primarily with local as opposed
to statewide, problems;
(5) Whether the entity has the authority to sue and be sued in its
own name; and
(6) Whether the entity has the right to hold and use property.
See Hudson v. City of New Orleans, 174 F.3d 677, 681 (5th Cir. 1999) (citing
Clark, 798 F.2d at 744−45). An underlying goal of this six-factor test is to
protect state funding; in turn, the second factor is the most important. Id. at
682. Each factor need not be present for state immunity to be extended. See
id.
In employing the Clark factors, 5 we conclude that UTSMC is entitled to
arm-of-the-state status; therefore, it has sovereign immunity from Plaintiff’s
ADA discrimination and retaliation claims.
Factor 1 (Statutory and Legal Authorities). UTSMC is part of the UT
System. See TEX. EDUC. CODE § 65.02 (a)(7).
4 See Regents of the Univ. of Cal. v. Doe, 519 U.S. 425, 429 n.5 (1997) (“[T]he question
whether a particular state agency has the same kind of independent status as a county or is
instead an arm of the State . . . within the meaning of the Eleventh Amendment, is a question
of federal law.”).
5 The district court order did not include the Clark analysis, so we discuss these factors
for the first time.
4
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A public university system is considered a state agency. See TEX. GOV’T.
CODE § 572.002(10)(B). Texas Government Code § 572.002(10)(B) defines
“state agency” as, among other things, “a university system or an institution of
higher education as defined by Section 61.003, Education Code.” Texas
Education Code Section 61.003(8)’s definition of “institution of higher
education” includes “any . . . medical or dental unit . . . as defined in this
section.” The definition of “medical or dental unit” includes UTSMC. See TEX.
EDUC. CODE § 63.003(5).
We have held that public universities are entitled to sovereign immunity
as arms of the state. See U.S. Oil Recovery Site PRP Grp. v. R.R. Comm’n of
Tex., 898 F.3d 497, 501–02 (5th Cir. 2018) (collecting cases). In several
unpublished opinions, we have likewise consistently treated health
institutions of the UT System, including UTSMC, as instrumentalities of the
State of Texas. See, e.g., Elhaj-Chehade v. Office of Chief Admin. Hearing
Officer, 235 F.3d 1339 (Table), 2000 WL 1672679, at *1 (5th Cir. 2000) (holding
that UTSMC “is an arm of the State”); U.S. ex rel. King v. Univ. of Tex. Health
Sci. Ctr. at Hous., 544 F. App’x 490, 495–98 (5th Cir. 2013) (per curiam)
(holding that the medical institution is an arm of state); Sullivan v. Univ. of
Tex. Health Sci. Ctr. at Hous. Dental Branch, 217 F. App’x 391, 392 (5th Cir.
2007) (per curiam) (“It is undisputed that UTHSC, as an arm of the state, is
entitled to Eleventh Amendment immunity.”); Scott v. Pfizer Inc., 182 F. App’x
312, 315−16 (5th Cir. 2006) (per curiam) (same with regard to University of
Texas Medical Branch).
These statutes and legal authorities favor treating UTSMC as an arm of
Texas.
Factor 2 (Source of State Funding). In evaluating the second and most
significant factor, we analyze “whether a judgment against [UTSMC] will be
paid with state funds.” Richardson, 118 F.3d at 455.
5
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Texas law authorizes state treasury funds to be allocated to UTSMC
from the permanent health fund for higher education. See TEX. EDUC. CODE
§ 63.002(c)(3). Here, Plaintiff recognizes that UTSMC receives state funding
but maintains that UTSMC is not dependent on state funding. She points to
an “August 2018 Legislative Appropriations Request Fiscal Years 2020 and
2021” report that states: UTSMC “receives no State dollars to construct or
operate clinical facilities.” 6 Because she was employed at Saint Paul, a
UTSMC medical facility that predominately relied on private funding, Plaintiff
urges us to infer that public funds would not be used to pay any resulting
judgment from this action. We disagree.
A similar contention was posed to us in United Carolina Bank v. Board
of Regents of Stephen F. Austin State University, 665 F.2d 553, 560 (5th Cir.
Unit A 1982). There, the district court held that the university was not entitled
to Eleventh Amendment protection because a judgment award did not
implicate general revenues of the state, as there were identifiable revenue
bonds available for a judgment payout. Id. (The entity “could itself pay such
an award because it had substantial unappropriated, separately held, locally
generated funds.”). But “[t]he key is not the ability to identify segregated
funds”; rather, it “is whether use of these unappropriated funds to pay a
damage award against [the university] would interfere with the fiscal
autonomy and political sovereignty of Texas.” Id. at 560−61. Because the
university also held funds in the state treasury and the funds were otherwise
restricted from use, we reversed the district court’s holding, refrained from
segregating identifiable funds, and extended sovereign immunity to the
6 Ironically, the exhibit containing the Legislative Appropriations Request is
UTSMC’s formal solicitation seeking more state funding for the forthcoming fiscal years.
This same exhibit also proclaims that “state support” is “the bedrock on which UTSMC’s
education and research missions are built.”
6
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university. Id. at 561 (stating that “any award from those funds would directly
interfere with the state’s fiscal autonomy”).
We see no reason to veer from United Carolina Bank’s reasoning, and in
turn, we reject Plaintiff’s segregation argument. Furthermore, Plaintiff’s
record support—which essentially relies on an isolated sentence that UTSMC
clinical facilities are privately funded—does not verify whether a judgment
against UTSMC would be satisfied with private or state-allocated funds. To
be clear, we do not draw a bright-line rule as to the amount of private funding
necessary to hold an entity financially independent from the state. Plaintiff’s
burden is to demonstrate (via evidentiary support) that UTSMC will be
responsible for its judgment and debts, not the state. Cf. U.S. ex rel. Barron v.
Deloitte & Touche, L.L.P., 381 F.3d 438, 440 (5th Cir. 2004) (noting that the
contractual terms dictate that the state not be responsible for any of the
entity’s debts and that the state be indemnified from any liability). She failed
to satisfy her burden in that respect. Thus, we conclude that a subsequent
judgment against UTSMC would interfere with Texas’s fiscal autonomy.
Accordingly, this factor—which is the “most significant”—supports a
finding that UTSMC is an arm of the State of Texas.
Factor 3 (Local Autonomy). As a component institution of the UT
System, UTSMC is governed by a board of regents “appointed by the governor
with the advice and consent of the senate.” TEX. EDUC. CODE §§ 65.11,
65.31(a) (“The board is authorized and directed to govern, operate, support,
and maintain each of the component institutions that are now or may hereafter
be included in a part of The University System.”). Plaintiff points to the
UTSMC website’s personnel page— which states that UTSMC is led by
physicians and scientists, with no mention of the Board of Regents—to assert
that Texas has minimal involvement in this entity’s day-to-day operations.
Assuming arguendo that this assertion were true, Texas still mandates that
7
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UTSMC follows statutory accounting and financial reporting requirements
because it receives state appropriated funds. See TEX. GOV’T. CODE §
2101.011(b) (requiring each “state agency” 7 to submit annual financial reports
to the Texas Governor and other public officials); cf. TEX. EDUC. CODE §
63.002(c)(3).
Considering the state oversight and financial regulation, UTSMC does
not operate with a level of “local autonomy” to consider it independent from
Texas. This factor supports UTSMC receiving arm-of-the-state recognition.
Factor 4 (Concerned with Local or State Issues). Plaintiff’s position is
that because UTSMC’s facilities are only in Dallas, UTSMC’s concerns should
be considered local. By Plaintiff’s logic, an entity’s concerns are limited to the
location of its office. This line of reasoning is flawed.
In King, an identical “lack of statewide presence” argument was
presented regarding a medical unit of the UT System, but we refrained from
isolating the institution from the UT System in our Clark analysis. 544 F.
App’x at 498. Instead, we evaluated the UT System as a whole. Id. (stating
that the UT System’s “locations throughout the state of Texas,” “[e]ducation
and research” were statewide concerns) (quoting TEX. EDUC. CODE § 61.002
(Texas Higher Education Board created to “benefit the citizens of the state in
terms of the realization of the benefits of an educated populace”)). Given the
similarity in arguments in King and the case at bar, we dismiss the “contention
that [UTSMC] is primarily concerned with local issues because it . . . [does not]
have a statewide presence.” Id. Because of UT System’s statewide presence,
components of the UT System shall not be confined to specific geographical
areas.
7 Cf., supra, Sect.III (stating, under Factor 1, that state agency includes university
systems which cover medical units like UTSMC) (citing TEX. GOV’T. CODE § 572.002(10)(B);
cf. TEX. EDUC. CODE §§ 63.003(5), (8)).
8
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Clark’s fourth factor therefore supports UTSMC as an arm of the state.
Factor 5 (Ability to be Sued or Sue). This factor bears a different result
than the previous factors. Here, we evaluate whether the entity may sue and
be sued in its own name. Texas law gives the UT System the authority to sue
on its own behalf and/or UTSMC’s behalf. See TEX. EDUC. CODE § 65.42 (“A
suit by The University of Texas System on its own behalf or on behalf of a
component institution of The University of Texas System to recover [debts]
owed to The University of Texas System or a component institution of The
University of Texas System must be brought in Travis County.”). However,
there are a number of cases (including one that reached the Supreme Court)
where UTSMC was sued or made an independent decision to sue on its own
behalf. See, e.g., Univ. of Tex. Sw. Med. Ctr. v. Nassar, 570 U.S. 338 (2013);
Walker v. Univ. of Tex. Sw. Med. Ctr., 638 F. App’x 394 (5th Cir. 2016) (per
curiam); Shah, 54 F. Supp. 3d at 681. Thus, this factor weighs against finding
UTSMC to be an arm of the state.
Factor 6 (Use of Property). Lastly, Plaintiff claims that UTSMC operates
its two hospitals without state control over its property management. Id. at
20. We disagree.
“The board of regents of the University of Texas System has the sole and
exclusive management and control of the lands set aside and appropriated to,
or acquired by, The University of Texas System.” TEX. EDUC. CODE § 65.39.
The components making up the UT System are subject to state eminent
domain to acquire or condemn land “that may be necessary and proper for
carrying out” the use of the state. Id. at § 65.33 (“The board has the power of
eminent domain to acquire for the use of the university system any land that
may be necessary and proper for carrying out its purposes. . . . The taking of
the property is declared to be for the use of the state.”). Put straightforwardly,
9
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the UT System has the power of eminent domain, and the land it acquires
becomes property of the state.
These characteristics evince UTSMC does not exclusively manage the
use of its property. Consequently, this Clark factor supports a finding of
UTSMC as an arm of the state.
IV.
In sum, five out of the six Clark factors, including the most important
source-of-funding factor, counsel in favor of a finding that UTSMC is an
instrumentality of the State of Texas. Accordingly, we hold that UTSMC is
entitled to Eleventh Amendment protection, 8 precluding our jurisdiction.
For the foregoing reasons, we AFFIRM the district court’s dismissal of
this action for lack of subject matter jurisdiction.
8 Of note, Plaintiff has not set forth any argument that an exception to sovereign
immunity applies here. Cf. Coleman v. Court of Appeals of Md., 132 S. Ct. 1327, 1333 (2012)
(“A foundational premise of the federal system is that States, as sovereigns, are immune from
suits for damages, save as they elect to waive that defense” or Congress has clearly abrogated
immunity via legislation). Thus, all arguments pertaining to the Eleventh Amendment
exceptions are forfeited. See Cinel v. Connick, 15 F.3d 1338, 1345 (5th Cir. 1994) (“A party
who inadequately briefs an issue is considered to have abandoned the claim.”).
10